Business

3:05 pm

Wed June 29, 2011

City Council Waives Fees for Convention Center Hotel

The mayor and City Council voted to waive $3.8 million in fees for White Lodging’s construction of a new convention center hotel in downtown Austin today.

Mayor Lee Leffingwell supports the construction of a convention center hotel as an effort to attract more tourism revenue. He says Austin’s convention center bookings have been declining because its capacity is too low. The mayor says he received interest in booking conventions as soon as rumors started circulating that Austin could expand its convention center space.

The construction of the hotel will require closing a sidewalk and parking lanes on northbound Congress Avenue. There will also be lanes closed on Second Street, Third Street and Brazos Street.

The project’s construction period is expected to be 30 months. Preparation for groundbreaking would take another nine months.

Some people at the meeting raised concerns that construction closures would cause an extreme inconvenience for people in the area. They feel the company should be expected to compensate the city for the cost. But ultimately, the fees were waived.

At $3.8 million, the project represents “a bargain” for Austin, according to Justin Bragiel, general counsel at the Texas Hotel and Lodging Association. He says convention center and hotel projects can easily cost cities 100 times this agreement.

Dallas paid $500 million in city revenue bonds for their new convention center hotel and San Antonio spent $78.3 million. Denver and Washington D.C. each spent more than $200 million.

However, all of those cities had equity deals in their new convention centers. Austin will not.

The fee waivers were passed in spite of many union representatives and labor-rights activists’ concerns that the project will not bring quality jobs to local workers, and could lead to exploitation of foreign guest workers. White Lodging said it offers health care insurance to all of its employees, including part-timers, and pays wages in the top-third of similar jobs.